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Why has he said so little, there has been so many talking heads quoting hypothetical economic outcomes from both sides yet the man that would be perceived to be in the know being the chancellor has said diddly squat so far

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Not wishing to defend the obnoxious pr*ck but he does have a lot on at the moment.

When is the next Budget?

The Chancellor of the Exchequer, will deliver the next Budget on Wednesday 16 March 2016.

The Budget and the Finance Bill are annual events, in part because income tax and corporation tax are annual taxes which have to be renewed by legislation each year. By contrast, most UK taxes including all indirect taxes, petroleum revenue tax and taxes on capital are ‘permanent’.

Guy from the RLA is already suggesting he's U-Turned on Pensions.... my reply.

HPCer - 15 hours agoOsborne hasn't done any U-Turn on pensions for he's not spoken about it yet.. FFS the Budget is in a few days. You can't smear him about U-Turns, when the Budget 2016 hasn't even taken place yet. Anyway Clause 24 is LAW now. Passed into law. At your age maybe you shouldn't be hard into BTL mortgage debt. Sell up and sell at lower prices to younger people.

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Politics. I don't believe he's looking at being PM, but making his own name in history as a Chancellor.

George Osborne no longer needs his nice little boom. He's back in Number 11 and he's got five years to make his dream of being PM a reality. With the Labour Party and Lib Dems in disarray, he has brilliant odds on achieving this. One problem. The bubble.

He has now proved that what he must have long suspected was the case is in fact the case, regarding the political costs, or rather benefits, of tearing the heads off the BTL massive and spitting down their throats.

From his perspective buy-to-let investors have some redeeming features, these are four I can think up off the top of my head.

1/ When you kick them, votes come out as everybody hates them

2/ When you blow them up, CGT receipts come out

3/ By blowing them up you can turn undecided or Labour voting renters into home-owning Conservative voters

4/ The new Tory vote pays you SDLT when they buy the house from the exploded buy-to-let investor

Now think about it this way. Basel 3 risk weighting could be used to jack buy-to-let lending rates easily 5% higher than rates to owner-occupiers. That would triple the interest expense, so a nice deniable way to blow up the buy-to-let investors is coming down the tracks and needs to be implemented before 2017 and could in principle be implemented by the end of this year.

Are you as confident as you'd like to have us believe?

It seems that the assumption is that Osborne lacks both the intelligence and the political aspiration to ride the tides of history in a manner that might be interpreted by a lay person as directing them. Given the latest budget I would be inclined to disagree.

Yes it's important to remember that the reason the Tories currently have a majority is that Osborne is better at politics than anyone else in Westminster at the moment.

When Brown wanted to call an early election which he would have won, Osborne spooked him with the inheritance tax announcement which shifted the polls. Osborne kept the plates spinning just enough during the previous parliament to hold together the electoral coalition which voted them in, and then immediately set about killing off the longer term threat from the rise in landlordism.

To go into the last election without revealing the living wage plan took immense restraint and fine political judgement. In the grand scheme of things, making BTLers go to the wall is just a small but necessary step.

Because the government is broke! (Or rather because they choose not to borrow any more they are limited to their tax base, and as we have masses of transfer spending to old people for being old, unemployed people for being unemployed and to employed people too, the government is effectively broke.)

Sorry for reposting these two graphs but they illustrate a classic New Labour boom approach to the economy.

[chart]

When you look at the housing benefit spending in the middle of the Blair/Brown years, 2004-2007 it doesn't look too bad. The level of the spend is not growing ahead of GDP. However if you look at the nominal things look a lot more alarming...

[chart]

Now what you see is the housing benefit spend exploding.

In my opinion what ties the strands together is that the credit boom flatters GDP growth, making the fiscal largesse look less alarming and perhaps even sustainable. However, when the boom ends the growth and the tax receipts disappear leaving you with transfer spending commitments that are very difficult to take back, (compare the outcry about the so-called bedroom tax compared to the tumbleweed silence regarding Clause 24 of the Finance Act 2015).

Hence the question is not how difficult is it to gouge the BTL brigade and how politically acceptable it is, the question is what are you going to do, where are you going to get the money from? If gouging the BTLers is practical (it is) and the politics work (they do) it will happen. Osborne needs to add to his tax take and cut spending. Neither is ever easy, but in both context some options are easier than others. BTLers are politically weak. They have assets and the assets generate income streams that can be taxed.

Is Osborne hunting for the capital gains jackpot?

Osborne isn’t just targeting landlords for extra income tax. In 2012-13, the Treasury took in £3.9bn from capital gains tax (CGT) on property. The Office for Budget Responsibility (OBR) is projecting £9bn for 2018-19. That’s some rise, and not all of it can come through house price inflation. So how is the Treasury going to get that money?

Perhaps the answer is from buy-to-let landlords.

Most buy-to-let investors don’t sell. They see nowhere better to put their money. They don’t want to take an untapered 18% or 28% CGT hit. It’s usually better business to do nothing and keep collecting rent.

Osborne’s changes might change that attitude. They will make the day-to-day business of buy-to-let less profitable. Tighter lending would cap house price gains. Is this part of a plan to make the buy-to-let model less viable, so that – in true ‘ministry of nudges’ fashion – many choose to sell, allowing Osborne to claim his CGT?

A very British subprime

If that’s the plan, then there could be a problem. And my thanks go to the posters on a thread at website House Price Crash for alerting me to this.

Rather than sell to realise their gains, many buy-to-letters remortgage. They extract the capital and use it to buy more properties. Remortgaging now accounts for two thirds of all buy-to-let mortgage transactions, according to the latest Mortgages for Business Complex Buy to Let Index.

Of course, when a landlord remortgages, CGT is not payable. There has been no disposal in the eyes of the taxman. Even so, those who remortgage and use the money for something else – be it another property, or a treat – are extracting the gains.

How many of those people have put any of that money aside to pay future CGT? Not many, I suspect.

I think that what the whining investors are missing is the fact that the government is cool as custard with bringing on the insolvency of the investors because the CGT receipts allow the government to continue to manage their own insolvency (h/t Michael Burry) and to remain the government, i.e. it keeps the Conservatives in power. It is bold, it is not without risks, but it is also right. Osborne's gonna "bring the rain" (h/t TBL) to the crap banks and their BTL quislings.

Look at this guy moaning on about Osborne. Osborne has shown his willingness to not just be Gubbermint. Dividends, BTL. Pension contribution cuts. Pay some real tax for once pal (this guy in video) and be happy about it. Massive deficit and national debt.

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On this occasion there's nothing sinister about it. My understanding is that it is established custom that the Chancellor stays out of the public eye and refrains from making statements, etc for a certain number of weeks leading up to the main budget.

I assure you we will all here and see him plenty in the days/weeks after the budget. :-(

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Politics. I don't believe he's looking at being PM, but making his own name in history as a Chancellor.

Published on 10 Mar 2016

Look at this guy moaning on about Osborne. Osborne has shown his willingness to not just be Gubbermint. Dividends, BTL. Pension contribution cuts. Pay some real tax for once pal (this guy in video) and be happy about it. Massive deficit and national debt.

It's good to see that verbalised afresh in the video (whether people agree with the policy emphasis or not it's a question of having a choice of government type) but plenty of people were saying much the same in the 90s with the then government which also called itself "Conservative". They didn't know what it stood for anymore whereas they had in the past as there had been a difference in the political parties in the past.

It's a reflection of the LibLabCon system now in the UK that's become increasingly evident for decades now.

A symptom of it is that it's still not that clear what Osborne's objectives regarding housing actually are although we know he was all in for a boom in the run up to the 2015 general election.